Federal agency seeks appeal in 'hot goods' case

SALEM — Federal regulators want a higher court to hear their case for using the threat of letting perishable crops rot as a means of settling a case in which they alleged that Oregon blueberry farmers hired “ghost workers” who worked off the book for less than the minimum wage.

In 2012, the agency threatened to use the power against two blueberry farms, reaching agreements requiring the farmers to pay $220,000 to settle the minimum wage allegations.

The farmers have disputed the wage allegations and challenged the settlement in court. They said they signed under duress without an opportunity to challenge the department's findings and would have lost millions if the agency blocked shipment of their blueberries.

In April, federal Judge Michael McShane agreed that the department's actions “threatened to cripple the growers” and threw out the settlements.

Attorneys for Department of Labor have asked the judge to allow the 9th U.S. Circuit Court of Appeals to review that ruling.

An appeal is necessary to resolve whether the department committed “fraud or misconduct” by invoking its hot goods authority, its lawyers said in court filings.

“This is a novel question that has never been addressed by any other court at any level of the judiciary, let alone by the Ninth Circuit,” the agency lawyers said.

McShane's permission is needed because his ruling didn't settle the case. It only resurrected it for further proceedings.

Tim Bernasek, a lawyer for Pan-American Berry Growers and B&G Ditchen, said the agency shouldn't be allowed to appeal until the lawsuit is finally decided, and says internal agency emails obtained by the Oregon Farm Bureau show the agency couldn't find a vast majority of the “ghost workers” it alleged.

“We want them to prove their case, which we don't think they'll be able to do,” Bernasek said.